Moody's Investors Service placed the 'B2' insurance financial strength ratings of XL Capital Assurance (XLCA), XL Capital Assurance (U.K.)  and XL Financial Assurance (XLFA) under review with direction uncertain yesterday, according to Moody’s release, and also placed the ratings of Security Capital Assurance (SCA) and a related financing trust on review for possible downgrade.

The ratings action was prompted by the SCA and XL Capital agreement approved by the New York Insurance Department and the Bermuda Monetary Authority. It provides for the termination of certain reinsurance, guarantees and other agreements with XL and its affiliates in return for a payment from XL of $1.775 billion in cash and 8 million shares of XL class A ordinary shares.

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